Securing your financial security once you hit 62 years old can be worrisome. Living our golden years comfortably should be our priority and we may want to consider applying for a reverse mortgage. With a reverse mortgage loan, you get to have additional funds that you may use for your healthcare and other expenses. To be financially secure in your 60s doesn’t have to be hard, especially with the three types of reverse mortgages that you can choose from. Find out about the different types of reverse mortgages and widen your option now!
Understanding Home Equity Conversion Mortgage (HECM)
The amount of how much the lender would pay you with HECM depends on several factors, such as your age, your home’s value, and the interest rate. You may receive the payments in a lump sum, a line of credit, or monthly payments. The main benefit of a HECM reverse mortgage is that it allows you to access the equity you have built up in your home without having to sell or move out. At the same time, it is also tax-free and is extremely beneficial if you need additional income for your expenses. On the other hand, you don’t have to repay the lender unless you sell your home, it’s no longer your primary residence, or you meet your untimely demise.
Proprietary Reverse Mortgage: What You Need to Know
Just like HECM, you get to access your home’s equity and receive payments the same way, such as a lump sum or monthly payments. However, their main difference is that proprietary reverse mortgage is not insured by the Federal Housing Administration. Instead, they are offered by private companies and are fitter for seniors with higher-value homes. The terms and requirements of proprietary reverse mortgage may differ from one lender to another so it’s a must for you to scout for the best option if you choose this type.
What are Single-Purpose Reverse Mortgages?
If you are looking for a reverse mortgage designed to help you with specific needs, a single-purpose reverse mortgage is the answer. This type of reverse mortgage is typically offered by local government agencies or non-profit organizations. The key benefit of a single-purpose reverse mortgage is that it can provide you with assistance for specific needs like paying home repairs or property taxes. Usually, it has lower fees or interest rates that the other types of reverse mortgages. Therefore, it’s beneficial for seniors who are on a tight budget.
Conclusion
Secure your financial needs by getting a reverse mortgage loan when you reach your golden years. All three mortgages are beneficial for you to access the equity of your home without having to move out or sell it. By understanding each type of reverse mortgage, you can find the best one that suits your needs and goals. Depending on what you need, all three types of reverse mortgages can benefit you in the long run. Be sure to consider the terms and requirements before making an informed decision. If you need help, consult with a qualified financial professional or you may contact us at Mann Mortgage. Get in touch with one of our loan officers to get started!